•We revised our group assessment of BEP to moderately strategic from nonstrategic, resulting in a one-notch uplift from the ‘bbb’ stand-alone credit profile to the final ‘BBB+’ rating.

•The stable outlook reflects our expectation that the company will continue to have fairly predictable cash flows due to its long-term contracts from its well-diversified portfolio of generation assets.

At the same time, S&P Global Ratings raised its senior unsecured debt rating on the company to ‘BBB+’ from ‘BBB’. S&P Global Ratings also raised its global scale preferred stock rating on BEP to ‘BBB-‘ from ‘BB+’, and its Canada scale preferred stock rating to ‘P-2(Low)’ from ‘P-3(High)’. Finally, S&P Global Ratings affirmed its ‘A-2’ short-term corporate credit rating on the company.

The upgrade follows our revision of the group status between BEP and parent Brookfield Asset Management Inc. (BAM), to moderately strategic from nonstrategic following our reassessment of BAM under different criteria (for more information, see the research update on BAM published Aug. 15, 2017, on RatingsDirect). BAM indirectly holds about 60% in BEP and we believe it exerts some level of control through its ownership interest; and exerts some influence as the service provider, where it charges BEP for management, administrative, and advisory services through the master service agreement. All these factors leads us to believe there will be some level of parental support, a key factor our group assessment.